$657b household debt weighing on Thai economy and new PM

Thailand’s 38-year-old Prime Minister is working on a plan to alleviate the economic drag from a household debt bill topping US$500 billion (S$657 billion) – a figure that has ballooned since her father first took office in 2001. A debt relief package – expected to be announced in the coming weeks – may include allowing banks to pay lower fees to the state bailout fund in exchange for providing easier terms to debtors. Economics professor Nattavudh Powdthavee from Singapore’s NTU said: “The government always gives bailouts like debt moratoriums and cash handouts to people, so they’re not trained to help themselves. It can lead to moral hazard and more debt creation. The easy access to illegal lending is also a factor. When people fail to service debt and resort to easy solutions, what they get is more debt.”

Click here to read article.